Former Apple Supplier Enters Buyout Talks

Imagination long provided its video and graphics processor technology to the California tech giant, but Apple reportedly told the company in April that it would end the partnership and develop its own processor designs.

The decision sent Imagination's stock price plummeting and, in recent weeks, prompted "a number of parties" to express interest in acquiring the company.

"The board of Imagination has therefore decided to initiate a formal sale process for the group and is engaged in preliminary discussions with potential bidders," the company said in a statement last week.

Potential buyers could include Apple as well as Intel, Qualcomm, Mediatek, CEVA or one of several Chinese companies, analysts told Reuters.

The company cautioned that a formal offer or purchase agreement was not certain to occur.

Imagination officials argued that Apple would likely not be able to develop its own graphics technology without violating Imagination's intellectual property and initiated a dispute-resolution process that remains ongoing.

The company added that sales of its MIPS and Ensigma operations, which began last month, are "progressing well."